Iran devalues rial by 11 percent to spur domestic demand

AP: The Iranian currency, the rial, was devalued by 11 percent on Wednesday as the government tries to liberalize its economy and curb imports.

The Associated Press

TEHRAN, Iran (AP) — The Iranian currency, the rial, was devalued by 11 percent on Wednesday as the government tries to liberalize its economy and curb imports.

The official exchange rate was 10,570 rials per U.S. dollar on Tuesday, and on Wednesday the Central Bank announced it would be 11,750 to the dollar.

The dollar sold for 12,250 rials in the open market. It was 70 rials against the dollar in 1979, the year an Islamic revolution toppled the pro-Western Shah Mohammad Reza Pahlavi.

The semi-official Fars news agency said Wednesday’s devaluation by the Central Bank was aimed at introducing a single exchange rate, rather than one official rate and one open market rate.

Ebrahim Razaghi, an Iranian economist, praised the devaluation and said it would help spur domestic production.

“Iran has been inundated with imported goods because of lower costs,” the official IRNA news agency quoted him as saying.